Schwab Reports Monthly Activity Highlights

Category:

Dateline:

Public Company Information:

NYSE:

SCHW

SAN FRANCISCO--(BUSINESS WIRE)--The Charles Schwab Corporation released its Monthly Market Activity
Report today. Company highlights for the month of August 2013 include:

Core net new assets (before significant one-time flows) brought to the
company by new and existing clients in August 2013 totaled $22.3
billion. Net new assets of negative $2.4 billion contained the
following items:

A reduction of $24.7 billion, reflecting changes to Schwab’s
retirement plan business as discussed below.

Also reflecting the retirement plan business changes, total client
assets were $2.08 trillion as of month-end August, up 12% from August
2012 and down 2% compared to July 2013.

Client daily average trades were 467.3 thousand in August 2013, up 24%
compared to August 2012 and down 6% compared to July 2013. August 2013
trading activity included a 2% sequential increase in daily average
revenue trades.

Schwab has decided to consolidate its two retirement plan recordkeeping
technology platforms. For the past six years, the company has supported
both the platform operated by the former 401(k) Company, which was
acquired in 2007, and the Schwab Retirement Information (“SRI”)
recordkeeping platform utilized under its primary full-service bundled
retirement plan offering.

Certain clients serviced on the acquired platform will be transitioned
to the SRI platform. Schwab will resign from providing recordkeeping
services to certain other clients. The retirement plans sponsored by
these clients are either unprofitable, include uniquely
resource-intensive servicing provisions, or are otherwise not an
appropriate fit for Schwab’s retirement plan servicing strategy.

Accordingly, Schwab has reduced its reported totals for overall client
assets and retirement plan participants (by $24.7 billion and 317,000,
respectively) to reflect the estimated impact of these changes.
Financial impacts are not expected to be material. Given the current
interest rate environment and financial market conditions, management
believes the company remains on track to deliver the 2013 financial
performance discussed at its Business Update on July 26, including a
pre-tax profit margin of at least 30% and earnings per share in the
mid-$.70s for the year.

CFO Joe Martinetto commented, “This decision is part of the retirement
plan business strategy we’ve been sharing for some time, which includes
the development of a program combining low-cost, index-focused
investment products with personalized advice to help create better
outcomes for participants. Our current strategy also places a greater
emphasis on client relationships that enable Schwab to bring more of its
capabilities to bear in serving participants so we can maximize the
value we deliver. With a more efficient and focused single recordkeeping
system, we can better leverage our resources in serving both plan
sponsors and participants, and we’re excited about the opportunities for
accelerating our growth in this arena.”

This press release contains forward-looking statements relating to the
company’s reduction in client assets and retirement plan participants
and the financial impact from the consolidation of two retirement plan
recordkeeping technology platforms; growth in revenues, earnings and
profits; gap between revenue and expense growth; expected revenues and
expenses and offsets; expenses; and pre-tax profit margin. Achievement
of these expectations and objectives is subject to risks and
uncertainties that could cause actual results to differ materially from
the expressed expectations.

Important factors that may cause such differences include, but are not
limited to, the actual number of clients whose relationship with Schwab
terminates as a result of the consolidation of two retirement plan
recordkeeping technology platforms; general market conditions, including
the level of interest rates, equity valuations and trading activity; the
company’s ability to attract and retain clients and grow client
assets/relationships; competitive pressures on rates and fees; the level
of client assets, including cash balances; the company’s ability to
monetize client assets; capital needs and management; the company’s
ability to manage expenses; the impact of changes in market conditions
on money market fund fee waivers, revenues, expenses and pre-tax
margins; the level of field sales activity and related incentive
compensation; regulatory guidance; acquisition integration costs; the
volume of prepayments in the company’s mortgage-backed securities
portfolio; net interest margin; client enrollments in advised solutions
and utilization of commission-free platforms; trading activity; the
company’s ability to develop and launch new products, services and
capabilities in a timely and successful manner; the effect of adverse
developments in litigation or regulatory matters and the extent of any
charges associated with legal matters; any adverse impact of financial
reform legislation and related regulations; and other factors set forth
in the company’s Form 10-Q for the period ended June 30, 2013.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of
financial services, with more than 300 offices and 9.0 million active
brokerage accounts, 1.3 million corporate retirement plan participants,
926,000 banking accounts, and $2.08 trillion in client assets as of
August 31, 2013. Through its operating subsidiaries, the company
provides a full range of securities brokerage, banking, money management
and financial advisory services to individual investors and independent
investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co.,
Inc. (member SIPC,
www.sipc.org),
and affiliates offer a complete range of investment services and
products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation
plan services; referrals to independent fee-based investment advisors;
and custodial, operational and trading support for independent,
fee-based investment advisors through Schwab Advisor Services. Its
banking subsidiary, Charles Schwab Bank (member FDIC and an Equal
Housing Lender), provides banking and lending services and products.
More information is available at www.schwab.com
and www.aboutschwab.com.